GreenPower Motor Co(US:GP)2024-02-13 20:23Financial Data and Key Metrics Changes - For Q3 2024, GreenPower generated revenue of $8.2 million, a decline of 36.3% from $12.8 million in the same quarter last year, primarily due to a decrease in vehicle sales [20] - Gross profit was $1.4 million with a gross profit margin of 16.6%, down from $2.2 million and 17.4% in the prior year's quarter, mainly due to an inventory write-down of $408,000 [21] - For the nine months ended December 31, 2023, revenue increased by 40.1% to $34.2 million from $24.4 million, driven by the sale of 196 vehicles [22] - The company reported a loss of $4.6 million for the quarter, compared to a loss of $3.4 million in the same quarter last year [21] Business Line Data and Key Metrics Changes - The School Bus group delivered 4 Type A Nano BEAST school buses and began production of Type D BEAST school buses, with live orders for 102 buses [9][10][11] - The Commercial Vehicle division delivered 10 EV Star Cab and Chassis, but is behind the School Bus group in terms of order book [12][13] Market Data and Key Metrics Changes - The company has a qualified sales pipeline for 164 GreenPower school buses, indicating strong demand in the market [11] - The introduction of the Mega BEAST school bus, which offers a range of up to 300 miles, has received immediate market response with an order for 25 units from a California dealer [27][28] Company Strategy and Development Direction - GreenPower is shifting from fulfilling orders from inventory to manufacturing vehicles based on customer orders, supported by a new revolving loan agreement for production financing [15][18] - The company aims to leverage new and existing incentive programs to drive growth in both the School Bus and Commercial Vehicle segments [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the production ramp-up but expressed confidence in meeting future demand as production capabilities increase [36] - The company expects to see improvements in gross margins as training and production processes stabilize [61][62] Other Important Information - As of December 31, 2023, GreenPower had cash of $4 million, an increase of $3.4 million since the beginning of the year, attributed to higher sales and improved collections [24] - The company secured a $5 million production financing facility from Export Development Canada, enhancing its manufacturing capabilities [18][77] Q&A Session Summary Question: Production ramp and delivery profile for BEAST buses - Management indicated that they need to complete a full production cycle for the BEAST before better visibility on throughput can be established [34][36] Question: Inventory management and cash conversion - Management plans to continue utilizing existing finished goods while transitioning to a build-to-order model, which is expected to improve cash conversion [41] Question: Charging infrastructure for school buses - Management noted that the availability of charging infrastructure is a significant factor affecting deployment, and the Nano BEAST offers more flexibility in charging options [45][47] Question: Working capital and inventory alignment - Management stated that work in process is well aligned with production flow, but finished goods still need adjustment to match sales [54][56] Question: Gross margins and production costs - Management acknowledged that early production of new models incurs higher costs, but margins are expected to improve as production stabilizes [60][62]